CEQA Roundup: For a moment, everyone lines up behind Steinberg

For one day this week, at least, all of the major players in the CEQA debate seemed to be on the same page: Which is to say, directly behind Senate President pro Tem Darrell Steinberg.

After several months of public squabbling over how to change the state’s premier environmental law, Steinberg made his pitch for his CEQA reform bill to the Senate’s environmental quality committee—and the line of people testifying in support went almost out of the committee room’s door.

“People on all sides are serious about this,” Steinberg told the committee. “I’ve come to the conclusion that CEQA doesn’t need to be fundamentally rewritten, but it needs to be updated. There are parts of the law that ought to be changed.”

Real disagreements still exist over how best to proceed (more below on where the debate seems headed), but on Wednesday, Steinberg was flanked by leaders of the business coalition supporting reform and environmental groups that have opposed overhauling the law. Queued up behind him were advocates from the newly-formed public works coalition—the public agencies responsible for implementing CEQA—as well as a range of affordable housing groups, alternative energy producers, and city planners.

What everyone agrees on

All seemed to agree on one thing: Steinberg’s SB 731 is a good-faith effort to reform the state’s more than 40-year-old environmental law.

Even labor leaders, who have publicly warned against tampering with CEQA, joined the chorus of support for Steinberg. "There are elements within the bill that stretch our comfort levels,” said Scott Wetch, a lobbyist for the California State Pipe Trades Council and other construction trades unions. "But we are really interested in having a piece of legislation that addresses some things that need to be fixed and puts an end to this ongoing nonstop assault on CEQA.”

After an hour of testimony, the committee unanimously voted to move Steinberg’s bill forward—and decisively voted against the more comprehensive reform attempt introduced by Sen. Tom Berryhill.

Sen. Hannah-Beth Jackson, one of the committee’s longtime environmental champions, summed up the mood in the room in her parting remarks to Steinberg: “I appreciate you taking the tiger by the tail, and God bless you for doing this.”

Now comes the hard part

With a floor vote still months away—and with the major stakeholders clearly making an effort to stay at the negotiating table—the real debate over CEQA now begins.

Committee hearings are often more about political theater than policy substance, and this week’s was no exception. Sen. Jerry Hill, the Silicon Valley Democrat who serves as the committee’s chairman—and who may be a good barometer of how Dems will balance the interests of business and environmental groups—didn’t comment at all during the hearing.

While speakers may have prefaced their remarks with supportive statements, there were certainly signs of lingering disagreements over how to proceed. As Steinberg himself acknowledged: “A lot of people on both sides don’t like [parts of] what’s in this bill."

A few of the most notable glimmers of potential opposition:

Business – “While we recognize we have a long ways to go to achieve meaningful modernization, we believe SB 731 is an important step forward,” said Gary Toebben, co-chair of the reform-minded CEQA Working Group and president and CEO of the Los Angeles Area Chamber of Commerce.

Environmentalists – “CLCV [the California League of Conservation Voters] has long opposed amendments that weaken CEQA’s central elements. We also disagree that sweeping or structural reforms are warranted,” said Rick Zbur, chairman of the CLCV board. “Overall and on balance, we support moving ahead at this time because it works within CEQA’s existing framework and because of its potential benefit for smart infill growth.”

Labor – “At this time, we’re not opposing this bill, but we’re not supporting it either,” said Robbie Hunter, president of the State Building and Construction Trades Council of California. “We do have confidence in the leadership of Sen. Steinberg…[but] we do have concerns it will lead to wholesale deregulation. We hope it will move forward so it can be streamlined and more efficient.”

Where the bones of contention are

As negotiations begin, there appear to be at least two major areas stakeholders will need to find agreement on for the bill to gain widespread support. (For our summary of the bill, click here.)

1. Thresholds: At the hearing, Steinberg himself acknowledged that his proposal to create new thresholds for environmental impacts like noise, parking, and traffic will be a tough sell. Though his approach is much narrower than the comprehensive “standards” approach introduced last summer by then-Sen. Michael Rubio—one that was quickly killed by Democrats—Steinberg did admit that, in concept, his new proposal would do much the same thing on a smaller scale:

“While we don’t adopt wholesale the standards approach, and I say this at my own peril, we do adopt parts of [it] in this bill,” Steinberg said, adding that he was committed to addressing complaints from the development community that the law’s current standards for impacts like traffic “levels of service,” for example, are standing in the way of smart transit and infill projects. (More on that here.)

Under his proposal, Steinberg said: “If a project meets the objective traffic level of service standard, there can’t be a lawsuit under CEQA. You can always challenge whether the standard has been met, of course. But not under CEQA.”

Two days after the hearing, some environmental groups were already raising the red flag over this issue. The Planning & Conservation League told members in their weekly newsletter that “concerns about other parts of the bill, including development of thresholds for certain areas of impact and allowing projects to continue while parts of the review are redone, prevent us from supporting it at this time.”

Those standards, it’s worth noting, are not actually set in the bill, which instead directs the Office of Planning & Research to develop guidelines for them by July 2014.

Will environmentalists trust that process? Will it be enough for business groups? And where will those thresholds apply, anyway? The bill currently limits its proposals to infill developments, but committee members showed interest in defining what, exactly, “infill” should really mean. A broader definition could make business groups happy, while a narrow one would be an effective way to render these proposals toothless.

Watch for thresholds to be a major bone of contention in the months to come.

2. Procedural changes: While thresholds seem likely to be the biggest source of disagreement in the bill, Steinberg’s proposed procedural changes to the law (many of which also appear in six other CEQA bills the committee approved this week) are also likely to be the subject of debate.

Steinberg opened his remarks this week by highlighting his efforts to reduce delays in the legal process—citing in particular his bill’s requirement that public agencies prepare their administrative record as a project goes through approval process, rather than after a lawsuit is filed. “This is estimated to cut the trial court litigation time frame in half,” Steinberg said.

Business groups, though, are still wary of adding new reporting requirements that could further complicate the CEQA process. This week, a group of attorneys at the law firm Perkins Coie outlined some of the potential unintended consequences Steinberg’s streamlining efforts might have. The attorneys say two proposals in particular could potentially create more CEQA lawsuits—not less—by creating new annual “causes of action” that would allow lawsuits to be filed.

Watch for local agencies and business groups to push for clarity on these issues (language is Perkins Coie’s):

New requirement for annual reporting: “The bill would impose a new requirement that lead agencies prepare an annual report on each approved project’s compliance with required mitigation measures . . . It is not clear whether the requirement to prepare and post the annual report would open up an annual opportunity to file a CEQA suit challenging such a report.”

Preparation of record for litigation: “It’s often obvious before the lead agency even starts work on the CEQA document that opponents will file a CEQA lawsuit. In apparent recognition of this fact, the amendment would allow applicants to request that the agency start preparing its ‘record of proceedings at the very beginning of the CEQA process and would require the lead agency to comply with that request for certain types of projects. . . . This may create substantial risk of new causes of action for violations of these newly created procedural requirements, exposing project approvals to even more litigation uncertainty than exists now.”